Correlation Between Post Holdings and General Mills
Can any of the company-specific risk be diversified away by investing in both Post Holdings and General Mills at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Post Holdings and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post Holdings and General Mills, you can compare the effects of market volatilities on Post Holdings and General Mills and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Post Holdings with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post Holdings and General Mills.
Diversification Opportunities for Post Holdings and General Mills
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Post and General is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Post Holdings and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Post Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Post Holdings are associated (or correlated) with General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of Post Holdings i.e., Post Holdings and General Mills go up and down completely randomly.
Pair Corralation between Post Holdings and General Mills
Given the investment horizon of 90 days Post Holdings is expected to generate 0.97 times more return on investment than General Mills. However, Post Holdings is 1.03 times less risky than General Mills. It trades about 0.05 of its potential returns per unit of risk. General Mills is currently generating about -0.03 per unit of risk. If you would invest 9,097 in Post Holdings on August 30, 2024 and sell it today you would earn a total of 2,838 from holding Post Holdings or generate 31.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Post Holdings vs. General Mills
Performance |
| Timeline |
| Post Holdings |
| General Mills |
Post Holdings and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post Holdings and General Mills
The main advantage of trading using opposite Post Holdings and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post Holdings position performs unexpectedly, General Mills can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in General Mills will offset losses from the drop in General Mills' long position.| Post Holdings vs. Simply Good Foods | Post Holdings vs. Treehouse Foods | Post Holdings vs. J J Snack | Post Holdings vs. Central Garden Pet |
| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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